The benefits of transferring your properties into your LP instead of your Trust, the reasons are as follows:
- Due to the passing of California Proposition 19, trusts no longer protect your real property from reassessment when they are transferred to your children when you pass away. However, real property held by entities such as your LP may hold the property and will have no need to be reassessed if you or your wife should pass away since the FLP never dies, there is no transfer.
- Real property, and any other assets held by an LP are insulated against claims by creditors or lawsuits if you ever happen to be sued personally.
- Limited Partnerships provide for management and succession of ownership.
- Since Limited Partnerships are businesses, they provide for additional tax benefits and write offs on many house expenses, thus you pay less taxes.
These are all benefits that Trusts do not provide, which is why we always recommend holding anything of value that you own in an LP.
For additional information, we do have pamphlets available, which goes into more detail about how the LP operates to protect you.